PepsiCo Sub Saharan Africa recently launched a R1.7-billion its broad-
based black economic empowerment (BBBEE) employee share
ownership plan, the Bašumi Trust, and has paid its maiden dividend  of R4-million, or about about R380 each to the roughly 11 000 beneficiaries.

PepsiCo sub-Saharan Africa recently launched its broad-based black economic empowerment (BBBEE) employee share ownership plan, the Bašumi Trust, with a maiden dividend payment of R1.7-billion to about 11,000 beneficiaries – or about R380 per beneficiary.  

Pioneer Foods produces a number of well-known South African brands, including Sasko bread, Spekko rice, Imbo beans and Ceres juices. PepsiCo already has a presence in the South African market, through its ownership of Simba, which produces Simba chips, Lays, NikNaks and Doritos. 

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The scheme is the culmination of a public interest commitment that the global beverage and food company made to the government in 2020 following its 100% purchase of Pioneer Foods. The commitments made by PepsiCo in 2020 included:  

• Employees in the company are to be issued shares in PepsiCo, worth R1.6-billion, to be used to finance a 13% stake in the local subsidiary after five years.
• At least one of the board members is to be elected by employees.
• To maintain aggregate employment levels at current levels for a five-year period.
• An investment of R6.5-billion in Pioneer Foods.
• A R600-million development fund levy to support small-scale farmers within the Pioneer Foods supply chain.  

PepsiCo sub-Saharan Africa’s Tertius Carstens. (Photo: Supplied)

Tertius Carstens, the chief executive of PepsiCo sub-Saharan Africa, says the establishment of the Bašumi Trust is an exciting milestone that is the culmination of months of planning, financial modelling and engagement with many stakeholders. 

“We believe this marks the beginning of what will be a fruitful journey for all our qualifying employees,” he says.  

The Bašumi Trust was specifically designed to create the most beneficial outcome, maximising the long-term economic benefit to approximately 11,000 beneficiaries. Participation is unencumbered and each beneficiary will immediately enjoy dividends. 

Melissa-Joy Golden, the chairperson of the Bašumi Trust, says all South African-based permanent employees of both Pioneer Foods and Simba (excluding directors), who were employed on or before 23 March 2020 and were still employed one year after the merger on 23 March 2021, qualify as beneficiaries of the trust. 

“Employees appointed after 23 March 2021 qualify to participate after their one-year work anniversary. Beneficiaries who leave the employ of PepsiCo are entitled to receive a once-off leaver distribution (or an accelerated milestone payment) and will then forfeit their unit and exit the scheme,” she explains.  

Carstens notes that the ownership plan meets both the letter and the spirit of the Competition Act, insofar as it relates to public interest commitments and the overall requirement for meaningful financial participation and inclusion for workers. 

The trust is independent and is governed by a board of trustees, made up of three union-appointed trustees, one trustee representing non-union employees, and one employer-appointed trustee, with external partners fulfilling the trust administration, banking and auditing roles. 

Golden says the 13% shareholding is in PepsiCo, listed on the Nasdaq in the US, and the trust will continue to hold that stock, regardless of whether PepsiCo continues to operate in South Africa – however, it seems the global giant is making a firm commitment to stay.  

“Unlike a typical employee stock ownership plan structured to distribute lump-sum payouts after a set vesting period, the Bašumi Trust offers qualifying employees the immediate financial benefit of a dividend together with the surety of future milestone distributions. Both of which have the potential to positively impact the lives of employees and the households they support,” Carstens adds. 

PepsiCo also recently launched the R600-million Kgodiso Development Fund, which aims to benefit local suppliers (SMMEs) and emerging farmers through programmes to promote opportunity and growth in SA.

The executive director of the fund, Diale Tilo, says over the next five years, the fund aims to: 

• Channel R300-million to agricultural development to help black-owned emerging farming enterprises to upscale their businesses.
• Allocate R200-million towards education initiatives that provide appropriate training and upskilling – enhancing the skills pipeline in South Africa. Within this pillar, PepsiCo launched a Future Leaders Programme last year.
• Award R100-million to SMMEs to provide incubation and technological support to those businesses that can become part of the PepsiCo supply chain.

“[The above] investment looks to encourage unique innovation, increase competitiveness and drive economic inclusion by building a pipeline of suppliers and entrepreneur networks, and providing them a route to market, business development support, funding and mentoring,” Tilo says. DM/BM

• This story has been edited to reflect that employee share scheme is valued at R1.7-billion, while the total value of the maiden dividend payment works out to just more than R4-million. Apologies for the error.